BARE: Shares Plunge to Historic Low After Q3 Results; CEO Comments
Submitted By Knobias ClipReport
BARE: Shares Plunge to Historic Low After Q3 Results; CEO Comments
By Fain Hughes, fhughes@knobias.com
Shares of Bare Escentuals, Inc. (BARE) plunged to an all-time low on Friday after the Company reported financial results for the third fiscal quarter ended September 28, 2008.
Net sales for the third quarter were $130.2 million, an increase of 3% from $126.6 million in the same period last year. Net income for the third quarter of fiscal 2008 was $22.9 million, or $0.25 per diluted share, an increase of 12% compared to $20.5 million, or $0.22 per diluted share in the third quarter of fiscal 2007.
Based on the Company’s third quarter results and the impact of the challenging consumer environment on current business trends, the Company now expects sales and earnings growth for fiscal 2008 of approximately 10% compared to the prior year.
Leslie Blodgett, CEO of Bare Escentuals, commented in a conference call, “While the challenging economic climate has clearly put pressure on the consumer, we continue to grow. However, we recognize that we can do things better. We have a great brand and millions of loyal customers that are passionately engaged with our brand and products. We are not satisfied with our results, which in no way reflect the strength and potential of our brand. We must continue to distinguish ourselves from the competition that attempts to follow us.”
She continued, “We have renewed our focus on customer acquisition as our number one priority. We built this company on innovative marketing. I am confident that we can grow our customer base faster than we have been, even in these difficult times. We have the highest brand awareness and continue to be the mineral brand that consumers indicate they are most likely to try. Our infomercials have allowed us to maximize customer acquisitions, however, the opportunity now exists to convert the high brand awareness from the infomercials into our expanded brick-and-mortar footprint. We expect that up to 50% of our investment supporting initiatives will now be outside of the infomercial channel.”
“Our distribution approach has allowed us to grow our market share and business far in excess of industry norms. However, we realize that there are opportunities to improve. We will do a better job of tailoring products based on the specific needs of each channel. We will also do a better job of managing growth across all channels.”
Ms. Blodgett added, “We are very excited about our growth prospects overseas. We are working aggressively to expand our international presence, with particular focus on U.K. department stores, European partnerships and continued growth in Japan.”
She concluded, “We are cutting costs to reflect the current economic environment. We have reduced our corporate workforce by about 10% and realigned several departments. This will best position us for long term success. We will invest wisely and grow our business profitably for the long term. We are redoubling our energies behind the highest return opportunities.”
